TechLahore

Salim Ghauri, talking to the Business Recorder, disclosed that Netsol PK’s revenues have exceeded the Rs. 1 BN mark. This is great news, but what is to be noted is that it represents YoY growth in the 10-15% range. While Netsol is a big software company viz the Pakistani IT landscape, in global terms it is very small. Therefore, with an export focused model, one wonders why the YoY growth rate isn’t much in excess of 15%. The story also has some other interesting data relative to the size of the Pakistan SW market.

About the size of IT industry in Pakistan, he said it had increased manifold and besides Karachi, the commercial and IT hub of Pakistan, a good number of IT companies are operating now in Lahore, Islamabad and a few in other major cities of the country. Out of 1056 IT companies, over 100 companies are ISO-certified and the industry’s total size, in terms of volume, has crossed the mark of US $2 billion and its exports are near to touch [sic] US $100 million.

Once again, the PSEB $2BN number. Believe it if you wish, but I still haven’t seen a credible break down of this that stands up to scrutiny.  I suppose based on how you define the revenue, one can come up with a number of market size projections. To be fair, this is a problem common to all but the most established industry sectors in the West as well. Market size estimation does involve more than a little conjecture at times.

However, the same story seems to contradict the $100 M export figure. If one can’t have accuracy, consistency at the very least would be something to settle for. But that too remains an elusive goal:

He said recent “bearing point study” places Pakistan’s global IT export revenue in the Financial Year 2004-2005 at $400 million. The basis of the figure was the State Bank of Pakistan’s IT export revenue figures of just under $50 million. Bearing point multiplied this figure by two to account for the IT export revenue brought into the country, but not registered as such with the State Bank.

So the bottom line: 1) Netsol is growing a little slower than one would have liked, and 2) the Pakistan IT industry is somewhere in the $2BN market size range.

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